It's evolution, baby -how institutions can improve without critical junctures Policy Brief (original) (raw)
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It’s Evolution, Baby – How Institutions can Improve without Critical Junctures
Policy Center for the New South, 2018
Daron Acemoglu and James Robinson caught policymaker’s attention to the critical role of institutions for development. Their work gives too much emphasis to the prospects of revolution, however. A reading of the World Bank’s World Development Report of 2017 points to directions that all actors involved in the process, whether domestic or international, elite or non-elite, can take to improve societies.
Institutions and Development: What We (Think We) Know, What We Would Like to Know
This paper takes the form of an extended literature review, outlining the key ideas that will need to be developed further in the course of the IPPG Research Programme. After an extended introduction, the next two sections are conceptual, the former elucidating key concepts and definitions, the latter examining various approaches to the analysis of institutions relevant for economic growth. Then the paper reviews much of the available evidence linking institutions and growth and covers in some detail the evidence regarding economic institutions, confirming that institutions matter. However, the findings from different studies are far from consistent in terms of identifying exactly what it is that matters. Given the prevalence of weak or poorly functioning states amongst the poorest countries of the world, the paper also reviews literature on the political aspects of development, particularly in relation to the role of institutions. Likewise, the paper selectively illustrates the ide...
International Journal of Business and Social Research, 2016
Strong institutions are often viewed as part answers to Africa's development dilemma. But given the resource constraints of many African countries, one would need to be selective as to which institution or institutions to commit scarce resources. An attempt to strengthen all institutions at the same time could be rather daunting. And many questions would remain. First, what is the relative importance of one institution to another? Second, whether all institutions exert an equal impact on comprehensive development as they do on economic growth. This paper on Institutions and Development, first published in 2007 tries to answer these questions. It has been modified (in the 2016 version) for three reasons-1, to bring the data up to date, 2, to use a different and possibly more accurate econometric model (fixed effect) for the analysis and 3, to assess if the same institutions remain more critical than others, as observed in 2007. Even though the rule of law institution would seem, in this revised version, to have a slightly better impact on GDP/Capita, government effectiveness is still dominant in both non-differenced and differenced models, especially when comprehensive development is considered.
2004
This paper addresses the political foundations for economic development in Africa and does so by exploring two basic themes: political accountability and political order. We say that political elites are accountable when, in order to retain office, they must employ power to serve the interests of those whom they rule. By political order we mean the extent to which people employ coercion to protect property rights rather than to trespass upon them. Where there is accountability, many hold, then those with power make policies that enhance the welfare of private citizens, as by rendering them more prosperous (e.g. World Bank 1991). And where there is political order, then there is security for property rights, rendering it in the interests of private agents to invest, to labor, and to generate higher levels of income .
"If you have already not seen this book by Matt Andrews (Harvard University), you are certainly missing an important part of the ongoing debates in the field of international development. The book offers a wonderful diagnosis of factors that have limited the success of institutional reforms in the developing countries. The book also also a provides a prescription for success in the form of a well-developed approach called 'Problem-Driven Iterative Adaptation' (PDIA). In the review, which is forthcoming in The European Journal of Development Research, I deploy insights from Political Economy of Institutions to engage with Matt's proposal for successful institutional reforms."
A note on institutions as the root cause of development–
Preface "Is there some action a government of India could take that would lead the Indian economy to grow like Indonesia's or Egypt's? If so, what, exactly? If not, what is it about the "nature of India" that makes it so? The consequences for human welfare involved in questions like these are simply staggering: Once one starts to think about them, it is hard to think about anything else-Robert Lucas" (Lucas 1988). In May 2008 we organized a workshop on "Institutions, Innovation and Development" at Aalborg University (see: http://www.business.aau.dk/wiid/). It was a successful event which resulted in fruitful and interesting interaction among participants. Another, and more tangible, output of the workshop is this collection of the working papers published in the working paper series of the Department of Business Studies, Aalborg University. The main motivation for the workshop is encapsulated in the quote from Robert Lucas above. Moreover, it is our conviction that research, within evolutionary economics, on innovation and technological change holds great potential for explaining and guiding economic development. The opening statement in the INNOGRIPS workshop on Innovation & Development which was held in Manchester in April 2008, nicely presents the argument: "Innovation studies have mainly originated in, and focused on, industrialised economies. In some ways this is not surprising, since much of the investment and pace-setting in innovation has stemmed from these countries. Though it took a long time for many economists to realise it, technological innovation has been widely recognised as a major factor in the growth of these economies. There is now increasing awareness of, and interest in, the importance of innovation for the so-called "less developed countries" (INNO GRIPS, 2008). The workshop put attention to themes as learning, innovation and institutional economics. Our intention was to strengthen research on developmental issues within the IKE-group through the involvement of other research groups and independent researchers (from inside or outside Aalborg University) with similar interests. The idea was to stimulate a positive and open atmosphere of informal interaction and discussion rather than standard presentations. Such a format is moreover suitable for outlining and/or identifying new important research areas.
One More Time: What are Institutions and How Do They Change?
Policy Research Working Papers, 2018
The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.